“When I grow up, I want to run a supply chain company,” said no one ever. So that’s precisely why Jesse Genet founded the online shipping supplies service Lumi with her Art Center College of Design classmate Stephan Ango. There aren’t exactly a lot of young entrepreneurs gravitating towards selling bubble mailers, boxes, and tape. And yet, these are items that millions of people touch every day amid a growing demand for e-commerce orders across every sector.
Genet and Ango stumbled across this business prospect hidden in plain sight after they felt the pain of ordering packaging for their first entrepreneurial venture, Inkodye, an art supply dye company. The shipping supplies industry has long catered to large corporations that are ordering hundreds of thousands of boxes, not start-ups looking for small run quantities. And the ordering process, which requires going through layers of middlemen and sometimes even using fax machines to submit orders, feels byzantine.
Lumi has stepped in as a conduit between the customer and the manufacturing partner. Using Lumi.com, customers can now customize their packing supplies in a few mouse clicks and submit orders of many sizes. Then a manufacturer for the job is chosen based in the work required and the proximity to the buyer’s location.
What the packaging industry lacks in glamour, it makes up for in opportunity. London-based industry analysts Smithers Pira predicts the worldwide cardboard packaging market size will reach $176 billion by 2019. Lumi is growing right along with the industry. Established in 2015, the company has expanded from five initial employees to 14. It is currently responsible for facilitating 300,000 shipped units of packaging per month for more than 5,000 companies, including MeUndies, Ugmonk, and the children’s clothing company Primary.
Here, Genet explains how she and Ango started one business idea (Inkodye) and ended up with Lumi, why designers shouldn’t feel intimidated by the idea of starting their own company, and why she lives in an Air Stream trailer parked next to Lumi’s 12,000 sq. ft. warehouse located south of the Arts District in Los Angeles.
How did you start with one venture, Inkodye, and end up with another in Lumi?
In 2009, when I met Stephan, we launched Inkodye around a fabric dye we invented that develops its color in the sun. In 2012, we went on Kickstarter and raised $268,437 dollars for it. Then we grew the business in both retail and through e-commerce.
Through running Inkodye, we realized how easy it was to launch our e-commerce store, but, when we swung over to the packaging side, it was so unpleasant and difficult to do the physical aspects of packaging a product. That planted the seed to launch Lumi. Towards the end of 2014, Stephan and I both had this sensation that we had taken the Inkodye product full circle. All the retailers that would be willing to sell it were already selling it, and all the customers that would be really geeked out about it, were already buying it. We had this feeling of, what else do we want to do with this knowledge? At first we put out all these other awful ideas – there was at least six months of us having bad ideas. Ultimately, they turned into what I feel is a good idea with Lumi. [Inkodye remains in operation today and it is sold exclusively in craft stores.]
What advice would you give to a design school graduate who is both intrigued and intimidated by the idea of starting their own business?
I think that designers often put business in this separate category. There is creativity, and then somewhere off in the distance there is business. I never viewed it that way. My mindset is that business is this tool for getting my work out in the world. For getting people to use it, see it, and pay for it. If you think of business as a tool for your creative effort, it becomes less intimidating. It leads to a healthier relationship that you have with the business side, as opposed to something you dread. I would encourage people to start there – your mindset.
How has the retail shipping supplies market traditionally operated, and what are you doing differently in the space?
The shipping supplies industry is interesting because it’s still operating in a very old school way. Almost 100% of the time when you send something out for a quote, you’re dealing with a broker or a distributor’s rep, and not the manufacturer. The manufacturers have insulated themselves over the last 50 years as much as possible from talking to small brands. They did this for a good reason. There was no Internet, and they had to find a way of focusing on manufacturing, so they set up all these layers of middlemen. It is like how people used to travel using travel agents. But now you just go the website to book your flight and you’re done. That same transition is happening in packaging. This lumbering, slow industry is going through a period of transition that other industries have already gone through 10 years ago. When you place an order at Lumi, that order goes directly to the manufacturer.
It’s also hard for small businesses to create relationships with old school packaging manufacturers because they are used to dealing with large conglomerates that are ordering hundreds of thousands of boxes. If you’re a start-up ordering 10,000 boxes that is not really a big deal to those companies, so it’s hard for young companies to get their foot in the door. At Lumi, we cater to companies of all sizes, including those who need as little as 1,000 custom boxes in a production run.
You’ve taken some VC money to grow, including from Chris Sacca’s lower case capital. What advice would you give designers looking for investor funding?
You have to ask for money at some point. I have a pet peeve when I watch a Kickstater video, and the person tells me how incredible everything they’re doing is, but at no time in the video do they say, “Here’s why I need this money, and I hope you contribute.” Again, I think designers sometimes suffer a little bit from thinking that “business” is a dirty word. Just endlessly talking about why your heart is in this is important, but it’s only half of it. If you spend 100% of you time talking about that, you will find yourself having great conversations, and no one will give you money.
How can a designer find other “hidden in plain sight” entrepreneurial opportunities?
A powerful question to ask yourself when you’re about to start a business is “What do other people find unsexy?” Usually, people starting businesses, and entrepreneurs in general, are very interested in looking cool and being cool people. There are not a lot of entrepreneurs gravitating towards stuff that doesn’t sound cool, like packing tape and boxes. What doesn’t sound cool at first blush is a good way to uncover opportunities.
On a personal note, you live in an Air Stream trailer next to the Lumi warehouse. Why?
I’ve always been into alternative lifestyle places to live – I used to live in an art loft. It’s not some statement about tiny living or anything like that. I just like experimenting, and I also really like not having a commute. I have a garden outside. I have a puppy. I like doing things that other people talk about in in bars but never actually do.